Bank CEO Blows Whistle on TARP

Feb 18, 2009

RUSH: Now, there’s a fascinating story at TwinCities.com, and it is by Nicole Garrison-Sprenger, posted yesterday. It’s about the president, the CEO of US Bancorp. His name is Richard Davis. It’s about the TARP plan. He says: ‘There is no ‘A, R or P’ in the government’s Troubled Asset Relief Program. ‘It’s just troubled,’ the 50-year-old CEO said at the Thrivent Financial for Lutherans’ Business Leaders Forum. The forum invites executives to discuss how business and their principles intersect.’

The CEO of US Bancorp, said that ‘while government officials marketed the program as a way to entice banks to lend again, TARP actually was designed to give solid banks like US Bancorp some extra cash to buy weaker banks in the system. US Bancorp did just that late last year when it acquired the assets of two failed banks in California, Downey Savings and Loan and PFF Bank &amp; Trust. ‘We were told to take it so that we could help Darwin synthesize the weaker banks and acquire those and put them under different leadership,’ he said. ‘We are not even allowed to mention that. … We were supposed to say the TARP money was used for lending.” This CEO told a group of people that TARP was never about credit, it was about Darwinism, it was about giving big banks some money to go buy little banks that were in trouble. The CEO Richard Davis says he’s ‘talking about it now because he and others oppose current and future strings attached to the program. Davis didn’t detail those strings, but he said he and some peers intend to voice their opinions to Washington, DC, soon.’

Now, don’t forget, the CEO of Wells Fargo also said he didn’t want the money; they weren’t in trouble; they didn’t have any bad mortgages out there. He said they were dragged in there and the Treasury secretary gave them ’til five o’clock that day to sign on the TARP, and they weren’t getting out of the room until they signed it. Okay, so they give us the money, they tell us to use the money to go buy smaller banks and now they’re punishing us for having the capital. He said he ‘refuses to stand by and let his company become ‘collateral damage’ in an attempt to nationalize the banks. … Davis also disclosed that a number of other states and cities have been working hard to lure US Bancorp away from the Twin Cities,’ but he’s not going to leave. He refuses to stand by and let his company become collateral damage. So one of the bank CEOs is out there now and saying this was never about lending, it was never about restocking the credit pile. It was about giving us capital to go buy other banks, and that’s exactly what happened. And then remember how mad Congress got at these guys? They got ripped for it! That’s what they were told to do by the Treasury secretary. They were called up to explain themselves to Barney Frank, and they couldn’t go public with this. They’re frustrated as hell. I guess that’s why Davis has gone public with it.